Brexit Institute News

Brexit: the 2019 General Elections in Spain and British Gibraltar

May 1, 2019

Brexit: the 2019 General Elections in Spain and British Gibraltar

Gerry O’Reilly (Dublin City University)

For months, commentators in Spain and abroad closely monitored the growing influence of populist and right-wing parties in Spain in the run-up to the 2019 General Elections. Similarly, events were closely watched by UK and EU citizens alike in the British Overseas Territory of Gibraltar (area: 6.8 sq. km.) and its Spanish hinterlands – Campo de Gibraltar in Andalucía. For people there, as in Dundalk, Newry, Derry/Londonderry, and Ireland, an immediate concern remains Brexit and future border arrangements (Reyes, 2019). Of course, the EU and authorities in Cyprus are also monitoring Brexit related events in Ireland and Gibraltar, due to the British Overseas Territory and Sovereign Base Areas of Akrotiri and Dhekelia on the divided island of Cyprus.

But what does this mean for Gibraltar, that was ceded by the King of Spain to the Crown of England in 1713 in the context of dynastic disputes, but never fully accepted by Spain that has called for retrocession ever since then. Essentially, in modern history right-wing parties in Spain have pursued more belligerent policies for recovering Gibraltar, than the more conciliatory strategies of left-wing parties. Nonetheless, no party in Spain would or could stand on a platform that renounces Spain’s claim to Gibraltar, as this would not be accepted by the electorate. This political spectrum in Spain regarding Gibraltar is largely mirrored in UK politics also. However, since the opening of the Anglo-Spanish Gibraltar border with Spanish adhesion to the EU in 1986, and major input of the Spanish Socialist Workers’ Party (PSOE) and British Labour administrations when in power, the EU provided a modus operando, for a successful modus vivendi to develop with greater integration of economies and communities.

Gibraltar (pop. 34,000) gets 11-12 million visitors annually, mostly arriving by land at the La Linea crossing, on the 1.2 km border, and 12,000 workers cross the Gibraltar border daily. About 50% of these workers are Spanish and the rest are either British or other EU citizens (Caleb, 2013). In comparison, over 110 million border crossings occur annually between Northern Ireland and the Republic for all categories: work, business, trade, education, health and family (Smith, 2017). The highest vote in the UK to remain in the EU – 96%, in the 2016 Brexit referendum was registered in Gibraltar. However, an even greater number of the electorate there want to retain sovereign links with the UK. In 2002, 99% of Gibraltar’s voters rejected the idea of joint sovereignty between Britain and Spain.

Citizens in Gibraltar and Campo

Citizens in Gibraltar and Campo alike, as well as the Gibraltar government and business communities, are closely following the Brexit imbroglio between the UK and Brussels authorities, and particularly, the contentious Backstop clause – safety net or ‘Barrera’ regarding the UK-EU/Irish border. While Northern Ireland is an integral part of the UK constitutionally, Gibraltar is not and remains a British Overseas Territory located within the EU, 1,800 km. from London, for which the British Government has constitutional responsibility with the EU (O’Reilly, 1999: 11-19).

When the UK joined the EEC/EU in 1973, Gibraltar (officially designated Crown Colony at that date) was included in the UK Accession Treaty as a territory for whose external relations the UK is responsible. However, Gibraltar is exempt from the Common Market provisions, Common Agricultural Policy (CAP), harmonization of turnover taxes, and VAT. Along with this, non-resident businesses do not pay income tax unless the source of this income is Gibraltar proper, and there is no tax on capital income; no capital gains tax, wealth tax, or sales tax making Gibraltar a thriving business centre in contrast to neighbouring Andalucía in Spain.

The Gibraltar Constitution (2006) does not in any way diminish British sovereignty there. The UK retains its full internal responsibility for Gibraltar, including external relations and defence, and relationship with the EU. However, Spain disputes British sovereignty, within the UN framework of decolonization (O’Reilly, 2015). Moreover, as clarified in the 2006 Gibraltar Constitution, Gibraltarians seek ‘decolonization’ of many existing UK political structures, and a more modern ‘democratic’ relationship with the UK. But it does not want decolonization of the Territory that would retrocede sovereignty to Spain, nor give Spain any input into rule there. This strategy promotes Gibraltar’s cultural ethnicity, and possible nationhood if necessitated by changing regional and global geopolitics, or a change in UK Government policy that might give Spain any form of sovereignty there. However, the only article of the 1713 Treaty of Utrecht (Article X) that ceded Gibraltar to the ‘Crown of England’ that Britain hasn’t broken to date regarding Gibraltar, is that if and when it decides to relinquish sovereignty, then Spain must get first preference to take control.

Relationships between Gibraltar (population 34,500) and neighbouring Campo de Gibraltar (population 300,000) in Spain are symbiotic. Gibraltar employment and trade represents 25% of the Campo de Gibraltar GDP, according to the Gibraltar Chamber of Commerce. Unions on both sides of the border and chambers of commerce are agreed that fluidity at the border and continued cross-border trading are critical to the Campo and greater Andalucía region which has the highest unemployment in Spain; the neighbouring town of La Linea had 33.26% unemployment in 2018 (Expansion/Datosmacro.com; Stothard, 2018).

Brexit negotiations

In 2017, Spain’s foreign minister stated that it wanted a bilateral deal with the UK including “managing the (Gibraltar) airport together” and greater co-operation on tax fraud and tobacco smuggling. In the usual Gibraltar/London and Spanish historical retort patterns, this was eventually followed up with Spain stating that: “Sovereignty is something we aspire to, that we are not renouncing, but in these negotiations, it is not the issue”. Brexit negotiations between the UK and EU have given new urgency to the Gibraltar dispute. In 2016, the Spanish government won a formal veto over the provisions of any future EU-UK deal that would apply to the Territory. Since Britain insists that Gibraltar must leave the bloc on the same terms as the UK, possible usage of such a veto could be problematic in any Brexit deal (Stothard, 2018).

In April 2018, the British Defense Secretary suggested that the UK is ready to use military force to defend Gibraltar’s sovereignty, vowing to go “all the way” to protect the territory. While a former Conservative leader Michael Howard, stated that Prime Minister Theresa May would defend Gibraltar with the same resolve that PM Margaret Thatcher had when she sent British troops to war with Argentina in 1982 over the Falkland Islands (another British Overseas Territory, SW Atlantic). In that ten-week conflict, the British were ultimately victorious, but left over 900 dead (Asthana, 2017). Theresa May would go to war to protect Gibraltar, Michael Howard said. Howard’s statement was largely dismissed by PM May, and rejected by most sections of the British political elite. Once again, this would suggest that the legacies and burdens of history have to be proactively challenged, as foreseen in Monet and Schuman’s vision for the European Project after WWII.

So what is the situation today for Gibraltar in the context of Brexit?

Sovereignty: In the UK there is cross-party consensus on the right to self-determination of the Gibraltarians and consequently their veto on any discussions regarding sovereignty. Gibraltar rejects Spain’s sovereignty claims and is supported by the UK government and opposition parties as being a matter for Gibraltar (UK Conservative Party Manifesto 2017: 36, Labour’s 2017 Election Statements; Liberal Democrat’s Manifesto 2017). Spain has sought to leverage sovereignty issues with the Clause 24 veto which would have Gibraltar’s future relationship with the EU subject to Spanish-UK bilateral agreements (i.e. a possible exclusive Spanish veto on the final Brexit deal).

The possibility of Gibraltar, being left out of the transition would mean Gibraltar being in a limbo in 2019, sending the Gibraltar and Campo economies into a downward spiral, leaving Spanish workers in Gibraltar with controversial EU protection of their rights, and looming unemployment.

Gibraltar and Good Governance: Three major areas of concern to Spain – (i) taxation and the finance centre, (ii) tobacco, and (iii) Gibraltar airport.

Gibraltar argues that it is meeting all EU and international agreements and has been seeking a tax information exchange agreement (TIEA) with Spain for years. On transparency, Gibraltar has committed to the open public central register of ultimate beneficial ownership and the requirements of the 5th Anti-Money laundering directive.[1] However, Spain remains cautious due to its historical experiences with the Gibraltar economy. Regarding the tobacco trade and loss of tax to Spain, the European Commission (2013/2014) looked into Spanish complaints about the volume of tobacco sales in Gibraltar. It identified the volume against the level of tourism and visitors/population and stated that Gibraltar complies with these quotas.

When Spanish authorities make complaints over loss of state revenue due to Gibraltar’s special tax and duty regimes on consumer goods including tobacco, alcohol and other products, ordinary Gibraltarians point out similar activities in Spanish Ceuta and Melilla in Morocco, and the Canary Islands – all three being an integral of the Spanish state under the Spanish Constitution and international law.

Concerning Gibraltar Airport, Gibraltar will not accept Spain’s claim that the airport and isthmus upon which it is built are not British sovereign territory. Spain distinguishes these lands from the Gibraltar territory proper ceded in the 1713 Treaty, as land (and associated artificially created territorial seaward extensions) that was acquired by Britain through ‘acquisitive prescription’ i.e. creeping jurisdiction with attempted ‘de facto’ possession over the centuries. However, Gibraltar has tried to meet Spanish aspirations of having a Basle style access to the airport i.e. Basle airport gives legal access rights to Switzerland, France, and Germany. So Gibraltar airport entrances/exits could cater for Gibraltar and Spain. This was planned as a result of the 2006 Gibraltar, UK, Spain tripartite Cordoba agreement. Gibraltar spent almost £80m to build a terminal which, if the Spanish complete an access portal on their side of the border, would allow easy flights with access straight into La Linea de la Concepcion, the bordering town. That agreement would allow joint commercial management of the facility and remains extant.

For the Gibraltar Government, Brexit discussions must respect Gibraltar’s sovereignty, jurisdiction, and control, and reflect the 2006 Constitution which invests Gibraltar with powers on all matters except foreign affairs, defence, and internal security. That means on certain subjects (as with devolved territories) that the UK cannot interfere, and it is Gibraltar that must engage in and decide on these. This is why Gibraltar engages in discussions with the British government and has warned that it cannot accept any threats woven into UK legislation or Brexit negotiations to impose legislation in a colonial manner. Like the Unionist DUP in Northern Ireland, the Gibraltar Government is closely monitoring ongoing Brexit discussions.

2019 Spanish General Elections

On 28 April 2019, the centre-left PSOE won 123 of the parliamentary seats or 28.27% of the vote in the general elections, just 11 seats short of a full majority. The PSOE is weighing up its options with other left-wing parties including Podemos (14.31% of the vote, 42 seats) and ERC – Esquerra Republicana de Catalunya (15 seats) to form a coalition government with prime minister Pedro Sánchez as leader. The right-wing Parties – with the most extreme being Vox gained a historic 10.26% of the vote (24 seats), Citizens (15.84%, 57 seats) and Popular (PP) – Peoples Party (16.68%, 66 seats) that were expected to do much better in the election.

The socialists did particularly well in their old heartland of Andalucía, where some had feared they would lose shares to Vox. However, Vox as expected, did well in southern coastal districts near Almería, not far from the Campo de Gibraltar. Elsewhere they won more of the available seats in Madrid than they did in Seville. Like other right-wing parties throughout Europe, Vox appealed to state-nationalist sentiments, Spanish history with ‘make Spain great again’ slogans, rejection of the breakup of the state as exemplified by the Catalan independence crisis and also traditional Christian values, largely in reaction to fears of immigration and globalization.

The national voting trends in Campo de Gibraltar municipalities are unlikely to be repeated in forthcoming municipal elections on 26 May 2019, but nonetheless suggest that support for traditional parties is shifting, opening the way for newcomer Vox. In the general election, La Linea, the closest Spanish town to Gibraltar, some 32.6% of the vote went to the PSOE, followed by Ciudadanos with 21%, Vox with 15%, the PP with 14.34% and Podemos with 12.5%. The PSOE vote in La Linea was unchanged from 2016, but Ciudadanos was up and Podemos down slightly. In Algeciras across the bay from Gibraltar, where in 2016 the PP had secured 36% of the vote, the result was even bleaker for Spain’s traditional party of the right. The PP secured 14.9% of the vote in Algeciras, and the PSOE received 28.8% of the backing, Ciudadanos 20% and Vox 19.6% (Reyes, 2019).

Visions for the European Project as laid down by the founding fathers of the EEC/EU, Monet, Schuman, and others in the immediate aftermath of WWII, believed that integrating the economies of the European countries would be a first step in avoiding violent territorial nationalistic conflicts. This would lead to a prosperous democratic sustainable Europe. As with the major German and French powerhouses of the EU, interstate violence within the Union would be unthinkable. In other EU areas, as in Northern Ireland and EU Balkan states, major economic and political progress has been made. Nonetheless, many European citizens too often taking the achievements of the EU for granted, must remain vigilant of the dangers posed by opportunistic politicians, and extremist populist right and left wing rhetoric offering one-dimensional answers.

[1] Gibraltar was the first EU jurisdiction to give effect to the terms of the 4th Anti- Money Laundering Directive (even ahead of the UK). It is also committed to the existing OECD international standard as regards the sharing of registers of ultimate beneficial ownership.

Gerry O’Reilly is Associate Professor in Geography, and International Coordinator for the School of History and Geography, Dublin City University, with research and teaching interests in geopolitics, political, economic and cultural geography, sustainable development and education.